The Fed will have to raise interest rates in July to appease ‘bond vigilantes,’ Yardeni says

• Not only does the market not believe the Fed will cut, but odds also are rising for a hike, with current pricing implying a 42% chance of an increase by the end of the year.
• “The Fed must catch up to the bond market to avoid losing control of borrowing costs and to appease the Bond Vigilantes,” Ed Yardeni, the head of Yardeni Research, wrote Monday.

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Sent to the Federal Reserve to lower interest rates, incoming Chair Kevin Warsh instead may have to push for higher levels to establish credibility, market veteran Ed Yardeni said.

Source: https://www.cnbc.com/2026/05/18/the-fed-will-have-to-raise-interest-rates-in-july-to-appease-bond-vigilantes-yardeni-says.html